reporter2
05-04-22, 10:33
PropNex CEO expects local demand to drive growth
Ismail Gafoor upbeat about the HDB, private resale market in 2022; high on company agenda to grow market share will be recruiting more agents.
Apr 04, 2022
https://i.imgur.com/jL72CQn.png
https://i.imgur.com/f1WOexe.png
PROPNEX Realty is banking on strong local demand to drive growth in a market weighed down by inflation concerns and measures to cool the fervent run-up of recent years.
PropNex, one of two real estate agencies that dominate transactions in both private and public housing, benefited from the bullishness that ran in 2021 across all market segments - Housing Development Board (HDB) resale, private residential resale, landed property, project marketing and residential rentals.
Mainboard-listed PropNex posted a net profit of S$60 million for the financial year 2021, up 106.4 per cent from S$29.1 million in 2020.
Revenue from project marketing saw the highest year-on-year absolute growth among all the segments, almost doubling to S$436 million in 2021 from S$219 million in 2020. However, as a percentage of total revenue, project marketing accounted for 46 per cent of last year's revenue, up just 3 percentage points from 43 per cent the year before.
"This indicates that the pie has grown bigger across all markets," said Ismail Gafoor, co-founder, executive chairman and chief executive officer (CEO) of PropNex.
"This is good, because I don't want to be dependent on one specific segment," he added. "One segment could be subjected to fluctuating sentiments, or cooling measures, or its investors might want to adopt a wait-and-see approach."
Since 2021, delays in both developer projects and build-to-order (BTO) flat completions have led buyers to look towards more readily available alternatives. Work-from-home or hybrid arrangements have also driven demand for quick and convenient upgrades. Gafoor expects this to continue in 2022, keeping the HDB and private resale market upbeat in the coming year.
In addition, 2021 saw high land bid prices, which might inflate the prices of some new developer projects, he said. This would also turn some customers towards the more affordable resale market.
Gafoor predicted that HDB and private resale volumes in 2022 will nearly match that of 2021. Meanwhile, new private home launches are expected to drop between 9,000 and 10,000 from over 13,000 last year.
Gafoor also expects more foreign tenants to enter the already tight rental market as Singapore eases its travel restrictions and borders open up completely.
One other sector seen as resilient is the landed housing market. Gafoor noted that the increased Additional Buyer's Stamp Duty (ABSD) will not have a large impact on this market segment as most Singaporeans who upgrade to a landed property will likely have only one upgraded home.
He noted that PropNex "has not been very strong" in consultancy services and Good Class Bungalow (GCB) sales. But earlier this year, PropNex introduced a division for GCB sales, separate from the agency's landed housing marketing. He also plans to ramp up the company's corporate leasing, valuation, as well as investment and collective sales departments.
High on the agenda to grow market share will be recruiting more property agents.
Since bottoming out in 2017, Singapore has seen a steady rise in Council for Estate Agencies (CEA) registered agents. PropNex saw a substantial growth of new joiners last year.
According to figures from Data.gov.sg and the CEA, as at Jan 1, 2022, PropNex had a total of 10,796 real estate agents. This grew to 11,239 as at April 1, maintaining PropNex's position as the largest property agency in Singapore. Second and third are ERA Realty and Huttons Asia with 8,578 agents and 4,343 agents, respectively.
Gafoor said: "I'm very confident we will cross the 12,000 person mark. Maybe even 13,000?"
PropNex's recruitment drive include "boot camps" priced at S$100-S$200 a head, for both new joiners and seasoned agents. Before the pandemic, the company's annual boot camps saw more than 2,000 attendees each year. It plans to conduct several rounds of training with smaller numbers of agents in 2022 to account for safe distancing measures and event capacity limits.
In addition to having more boots on the ground, PropNex has also been working to keep its brand high in consumers' minds.
From February to August this year, the agency is holding a "property expo" to market developer projects and reach new customers.
PropNex is also selling a Hasbro-licensed version of Monopoly, which includes Singapore property segments such as the CCR (core central region) and OCR (outside central region), familiar spots such as Marina Bay Financial Centre, as well as the ABSD. Retailing at S$49.99, over 12,000 sets of the board game have been sold since its launch in January 2021.
Yet analysts have been mixed on the prospects facing PropNex, with several forecasting a fall in earnings as new home sales take a hit from the market cooling measures.
While the additional taxes slapped on multiple property ownership have dampened sales of property as investment, Gafoor is optimistic that the real estate market will remain resilient on the back of internal demand.
According to data from PropNex Research and the Urban Redevelopment Authority (URA), Singapore citizens and permanent residents (PRs) made up 96.1 per cent of non-landed home sales last year, up from 79.3 per cent in 2011.
In outside central region, the dwindling stock of unsold executive condominiums (ECs), which are a public-private hybrid, will be replenished by 3 launches scheduled for 2022 totaling almost 2,000 flats.
North Gaia at Yishun Avenue 9, scheduled to launch in April, will put 600 units on the market. Two other ECs, at Tengah Garden Walk and Tampines Street 62, are expected to launch in Q3 and Q4 with 615 and 590 units, respectively.
Meanwhile, with a higher ABSD rate for foreign buyers, core central region projects might see developers moderating prices to appeal to Singaporean buyers.
Despite the bullish market, PropNex is not complacent. Gafoor said: "Beyond 2025, even though it's a bit early to predict, PropNex is not waiting to capture the market where we are. We are also growing the company to reach areas where we have not been."
Beyond Singapore, he also targets regional growth, and plans to beef up teams in markets such as Malaysia, Vietnam, Cambodia and Indonesia.
https://www.businesstimes.com.sg/companies-markets/propnex-ceo-expects-local-demand-to-drive-growth
Ismail Gafoor upbeat about the HDB, private resale market in 2022; high on company agenda to grow market share will be recruiting more agents.
Apr 04, 2022
https://i.imgur.com/jL72CQn.png
https://i.imgur.com/f1WOexe.png
PROPNEX Realty is banking on strong local demand to drive growth in a market weighed down by inflation concerns and measures to cool the fervent run-up of recent years.
PropNex, one of two real estate agencies that dominate transactions in both private and public housing, benefited from the bullishness that ran in 2021 across all market segments - Housing Development Board (HDB) resale, private residential resale, landed property, project marketing and residential rentals.
Mainboard-listed PropNex posted a net profit of S$60 million for the financial year 2021, up 106.4 per cent from S$29.1 million in 2020.
Revenue from project marketing saw the highest year-on-year absolute growth among all the segments, almost doubling to S$436 million in 2021 from S$219 million in 2020. However, as a percentage of total revenue, project marketing accounted for 46 per cent of last year's revenue, up just 3 percentage points from 43 per cent the year before.
"This indicates that the pie has grown bigger across all markets," said Ismail Gafoor, co-founder, executive chairman and chief executive officer (CEO) of PropNex.
"This is good, because I don't want to be dependent on one specific segment," he added. "One segment could be subjected to fluctuating sentiments, or cooling measures, or its investors might want to adopt a wait-and-see approach."
Since 2021, delays in both developer projects and build-to-order (BTO) flat completions have led buyers to look towards more readily available alternatives. Work-from-home or hybrid arrangements have also driven demand for quick and convenient upgrades. Gafoor expects this to continue in 2022, keeping the HDB and private resale market upbeat in the coming year.
In addition, 2021 saw high land bid prices, which might inflate the prices of some new developer projects, he said. This would also turn some customers towards the more affordable resale market.
Gafoor predicted that HDB and private resale volumes in 2022 will nearly match that of 2021. Meanwhile, new private home launches are expected to drop between 9,000 and 10,000 from over 13,000 last year.
Gafoor also expects more foreign tenants to enter the already tight rental market as Singapore eases its travel restrictions and borders open up completely.
One other sector seen as resilient is the landed housing market. Gafoor noted that the increased Additional Buyer's Stamp Duty (ABSD) will not have a large impact on this market segment as most Singaporeans who upgrade to a landed property will likely have only one upgraded home.
He noted that PropNex "has not been very strong" in consultancy services and Good Class Bungalow (GCB) sales. But earlier this year, PropNex introduced a division for GCB sales, separate from the agency's landed housing marketing. He also plans to ramp up the company's corporate leasing, valuation, as well as investment and collective sales departments.
High on the agenda to grow market share will be recruiting more property agents.
Since bottoming out in 2017, Singapore has seen a steady rise in Council for Estate Agencies (CEA) registered agents. PropNex saw a substantial growth of new joiners last year.
According to figures from Data.gov.sg and the CEA, as at Jan 1, 2022, PropNex had a total of 10,796 real estate agents. This grew to 11,239 as at April 1, maintaining PropNex's position as the largest property agency in Singapore. Second and third are ERA Realty and Huttons Asia with 8,578 agents and 4,343 agents, respectively.
Gafoor said: "I'm very confident we will cross the 12,000 person mark. Maybe even 13,000?"
PropNex's recruitment drive include "boot camps" priced at S$100-S$200 a head, for both new joiners and seasoned agents. Before the pandemic, the company's annual boot camps saw more than 2,000 attendees each year. It plans to conduct several rounds of training with smaller numbers of agents in 2022 to account for safe distancing measures and event capacity limits.
In addition to having more boots on the ground, PropNex has also been working to keep its brand high in consumers' minds.
From February to August this year, the agency is holding a "property expo" to market developer projects and reach new customers.
PropNex is also selling a Hasbro-licensed version of Monopoly, which includes Singapore property segments such as the CCR (core central region) and OCR (outside central region), familiar spots such as Marina Bay Financial Centre, as well as the ABSD. Retailing at S$49.99, over 12,000 sets of the board game have been sold since its launch in January 2021.
Yet analysts have been mixed on the prospects facing PropNex, with several forecasting a fall in earnings as new home sales take a hit from the market cooling measures.
While the additional taxes slapped on multiple property ownership have dampened sales of property as investment, Gafoor is optimistic that the real estate market will remain resilient on the back of internal demand.
According to data from PropNex Research and the Urban Redevelopment Authority (URA), Singapore citizens and permanent residents (PRs) made up 96.1 per cent of non-landed home sales last year, up from 79.3 per cent in 2011.
In outside central region, the dwindling stock of unsold executive condominiums (ECs), which are a public-private hybrid, will be replenished by 3 launches scheduled for 2022 totaling almost 2,000 flats.
North Gaia at Yishun Avenue 9, scheduled to launch in April, will put 600 units on the market. Two other ECs, at Tengah Garden Walk and Tampines Street 62, are expected to launch in Q3 and Q4 with 615 and 590 units, respectively.
Meanwhile, with a higher ABSD rate for foreign buyers, core central region projects might see developers moderating prices to appeal to Singaporean buyers.
Despite the bullish market, PropNex is not complacent. Gafoor said: "Beyond 2025, even though it's a bit early to predict, PropNex is not waiting to capture the market where we are. We are also growing the company to reach areas where we have not been."
Beyond Singapore, he also targets regional growth, and plans to beef up teams in markets such as Malaysia, Vietnam, Cambodia and Indonesia.
https://www.businesstimes.com.sg/companies-markets/propnex-ceo-expects-local-demand-to-drive-growth